ASX Mining Share Surges 10% as Syrah Announces Deal with Samsung SDI
In a significant development, the ASX mining share has seen a surge of 10%, reaching 70.5 cents, following the announcement of a deal between Syrah and Samsung SDI. Investors have responded positively to the news, resulting in increased buying activity for the graphite producer’s shares.
The deal entails a non-binding memorandum of understanding (MOU) between the two companies. As per the MOU, Syrah’s Vidalia AAM facility in Louisiana, USA, will be evaluated as a potential supplier of natural graphite active anode material (AAM) for Samsung SDI, a leading manufacturer of batteries and electronic materials.
Moreover, the MOU signifies a commitment from both parties to continue testing and qualifying Vidalia AAM, with the aim to finalize a binding offtake agreement by July 10, 2024. This agreement would secure a supply of up to 10,000 tons per annum (tpa) of AAM from Vidalia, commencing in 2026. The offtake agreement is slated to employ a floating price mechanism, which will only come into effect after Vidalia has completed its expansion to a 45,000 tpa AAM production capacity.
The collaboration between Syrah and Samsung SDI will not end there. Both companies are dedicated to further cooperation and expanding volumes to meet the growing demand in the electric vehicle market.
Excitingly, the development of the Vidalia facility is progressing swiftly. Vidalia aims to establish itself as a vertically integrated natural graphite AAM supply alternative for battery supply chains in the USA. The construction of the 11,250 tpa AAM facility is nearing completion, with production expected to commence shortly.
In April 2023, a definitive feasibility study on expanding Vidalia’s production capacity to a minimum of 45,000 tpa AAM, including the initial 11,250 tpa AAM capacity, was successfully completed. Syrah now has its sights set on achieving readiness for a final investment decision (FID) for this expansion project by the second half of 2023. However, the timing of the FID will be influenced by customer and financing commitments, as well as equity market conditions. Once the FID is approved by the Syrah Board, detailed engineering, procurement activities, and construction will follow suit.
Despite today’s gain, Syrah shares have experienced a decline of over 50% in the past year. However, the collaboration with Samsung SDI appears to have injected renewed optimism among investors.
This strategic partnership between Syrah and Samsung SDI holds great potential, not only for the companies involved but also for the future of sustainable energy and electric vehicle industries. The focus on natural graphite AAM production and its use in batteries further underscores the significance of this collaboration.
As demand for electric vehicles continues to rise globally, securing a reliable supply of essential materials like AAM becomes crucial. Syrah’s Vidalia facility, once fully operational, has the potential to play a pivotal role in meeting this demand and facilitating the growth of the electric vehicle market.
With the battery industry showing no signs of slowing down, partnerships like the one between Syrah and Samsung SDI will further advance the transition towards cleaner, more sustainable energy solutions. The deal signifies a significant step forward for Syrah and reinforces the company’s position in the graphite market.
The news of the collaboration has certainly generated heightened interest surrounding Syrah, and investors will be closely monitoring the progress of Vidalia’s expansion and the subsequent binding offtake agreement with Samsung SDI. As the electric vehicle market continues its upward trajectory, Syrah is well-positioned to contribute significantly to the industry’s future supply needs.
